The FCA has banned insurance adviser Martin Sarl from working in financial services and fined him £5,021 for acting without honesty and integrity.

Mr Sarl was found to have failed to pass on insurance premiums from clients to providers, effectively leaving clients without cover.

He used some of the money to pay personal debts.

From 7 November 2017 to 24 October 2019, he was the sole director at Bristol-based Perry Prowse (Insurance Consultants) Ltd.

FCA investigations found that Mr Sarl used money from the firm’s client account to pay his personal debt and those of his firm.

The regulator said this was not allowed under its Client Money rules and the funds should have been kept separate. 

Because of his actions there was not enough money to transfer the premiums that his customers had paid to him to insurers, leaving clients uncovered. 

Customers asked Mr Sarl what was happening and he blamed a false 'IT glitch'. In at least one instance, a customer had a claim rejected because they did not have cover in place. 

Therese Chambers, joint head of enforcement and market oversight at the FCA said: “Mr Sarl's customers trusted him to keep their money safe and to secure the insurance cover they needed. Instead he helped himself to prop up his business and personal finances. He compounded this by lying to his customers.

“This left many people at risk of being unable to make a claim should they have needed to. It is right that Mr Sarl should be banned from the industry.”

The FCA said that Mr Sarl’s penalty was reduced from £63,600 to just over £5,000 as Mr Sarl provided evidence that the payment of £63,600 would cause him serious financial hardship. The penalty was reduced to £5,021 as this was the amount that the authority considers was the financial benefit derived directly from his breaches.

As a result of his actions, the FCA found Mr Sarl not a fit and proper person to perform any function in relation to any regulated activities carried on by any authorised or exempt person or exempt professional firm, and the FCA withdrew approval for Mr Sarl to perform the function of SMF3 Executive Director at Perry Prowse.

On 13 September 2019, the FCA took action to vary Perry Prowse’s permission to remove all of its regulated activities with immediate effect. On 16 January 2020, the firm entered into liquidation. 

The customer whose insurance claim was refused because they did not have insurance in place was later reimbursed through the Financial Services Compensation Scheme.